CALL LOAN RATE

Banks loads a non-permanent interest rate on credits that is stretched out to broker-dealers which is called call loan rate. This rate is an interest put on credits made to broker-dealers who use the reserve money to make a margin credits to their margin account customers. These loans can be payed by the broker-dealer on call (i.e. on demand or immediately) at the time they received the request from the lending company. This rate is also the maker of the benchmark on which margin credits are valued. This rate can vary anytime in reaction to determinants such as economic conditions, market interest rates and funds' demand and supply. The rate is shown in everyday news source including the IBD or commonly called as Investor's Business Daily and Wall Street Journal. Broker's call is another name for call loan rate.